From: Johnson Lau <jl2012@xbt.hk>
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Date: Fri, 24 May 2019 16:15:45 +0800
References: <CAD5xwhgHyR5qdd09ikvA_vgepj4o+Aqb0JA_T6FuqX56ZNe1RQ@mail.gmail.com>
	<42F53D61-BAAE-464F-BB0D-4D0CDC554D9A@gmail.com>
To: Tamas Blummer <tamas.blummer@gmail.com>,
	bitcoin-dev <bitcoin-dev@lists.linuxfoundation.org>
In-Reply-To: <42F53D61-BAAE-464F-BB0D-4D0CDC554D9A@gmail.com>
Message-Id: <21B03A11-EED7-423B-B885-9A963E86A708@xbt.hk>
Subject: Re: [bitcoin-dev] OP_DIFFICULTY to enable difficulty hedges (bets)
 without an oracle and 3rd party.
Precedence: list

A gamble like this, decentralised or not, is easy to manipulate since =
difficulty is determined entirely by the last block in a cycle

> On 24 May 2019, at 1:42 AM, Tamas Blummer via bitcoin-dev =
<bitcoin-dev@lists.linuxfoundation.org> wrote:
>=20
> Difficulty change has profound impact on miner=E2=80=99s production =
thereby introduce the biggest risk while considering an investment.
> Commodity markets offer futures and options to hedge risks on =
traditional trading venues. Some might soon list difficulty futures.
>=20
> I think we could do much better than them natively within Bitcoin.
>=20
> A better solution could be a transaction that uses nLocktime =
denominated in block height, such that it is valid after the difficulty =
adjusted block in the future.
> A new OP_DIFFICULTY opcode would put onto stack the value of =
difficulty for the block the transaction is included into.=20
> The output script may then decide comparing that value with a strike =
which key can spend it.=20
> The input of the transaction would be a multi-sig escrow of those who =
entered the bet.=20
> The winner would broadcast.=20
>=20
> Once signed by both the transaction would not carry any counterparty =
risk and would not need an oracle to settle according to the bet.
>=20
> I plan to draft a BIP for this as I think this opcode would serve =
significant economic interest of Bitcoin economy, and is compatible with =
Bitcoin=E2=80=99s aim not to introduce 3rd party to do so.
>=20
> Do you see a fault in this proposal or want to contribute?
>=20
> Tamas Blummer=20
>=20
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